From cashiers to car washes, we’ve watched technology reshape industries and eliminate jobs through increased automation.
While many of us may have thought more complex roles and industries would remain sheltered from increasingly advanced technology, a recent report by Remit Consulting said 88% of the core tasks performed by real estate service firms are ripe for technological takeover.
The report, The Impact of Emerging Technologies on the Surveying Profession, was commissioned by the Royal Institute of Chartered Surveyors, an organization that represents real estate service providers in the U.K., and concluded large swaths of the commercial real estate industry will be highly automated within the next decade. From the Internet of Things to machine learning, advanced technologies promise to both disrupt and boost efficiencies throughout the industry.
Data, machine learning and the IoT
The report divided the core roles performed by real estate professionals into a set of 43 distinct tasks, and said the tasks most reliant on data will be the first automated. Tasks like property appraising, writing reports, drafting contracts and even risk and performance management are ultimately tied to data and likely to experience varying levels of automation. And that’s largely because of technologies that implement machine learning.
There are already applications that create property valuations mechanically, but they haven’t gained large-scale adoption because the current technology often fails to effectively capture market opinion. Misreading the market throws these valuations off, but Remit said this problem could disappear as data gets better and machine learning algorithms develop to the point that programs steadily improve their results over time. Once this happens sectors of the commercial real estate industry that focus on analyzing and using data could be largely automated.
The report also highlighted the Internet of Things as a major disruptor in the industry. Everyday more objects are connected to the internet, and by 2020, estimates suggest some 50 billion objects will be connected to each other through the IoT. It’s likely this development will drastically increase building visibility and responsiveness, and eventually make it possible to remotely manage nearly every aspect of a portfolio. Additionally, the IoT will make it easier to collect far more data as more and more things are connected and intercommunicating. That data will make it possible to automate even more tasks.
Most CRE professionals don’t believe it
While the pace of technological development suggests significant sections of the commercial real estate industry will be more or less automated within a decade, most professionals in the industry don’t think that will happen. Remit asked industry professionals how likely they thought it was that their job could be automated in the near future, and on average respondents said they think there is a 46% chance technology could reshape major roles in the industry. That’s way off from the 88% chance predicted by experts in the report, revealing a gap between the potential for change in the real estate world and where industry professionals think they are heading.
Remit said tasks like asset management planning, collecting rent, monitoring markets, managing risk, preparing contracts and assessing property values are all very likely to be 100% automated within the next ten years. Most other tasks are expected to be between 20% and 80% automated within the same time frame.
“The burden of this risk is likely to fall disproportionately on the commercial property, residential property, and valuation sectors but facilities management is also likely to be affected significantly by sensor-based technology around the IoT,” the report said.
The one role that is completely safe from an imminent technological takeover, according to Remit, is the buying and selling of real estate. That makes sense, seeing as interpersonal skills are critical to making good deals, and it’s not likely technology will be able to recreate those anytime soon. Strategy and policy development are also considered only marginally at risk, largely because those tasks are not ultimately about processing data.
What these changes mean for the industry
The most obvious consequence of technological automation is job loss. Roles that rely heavily on analyzing data could be eliminated altogether, and roles that focus partially on analyzing data could watch their responsibilities shift. While it’s hard to deny technology displaces and destroys jobs, the report predicted many jobs will be shifted rather than destroyed altogether. For example, instead of having an army of property accountants analyzing data, firms may emphasize roles that manage customer relationships.
Looking to the future, Remit said tomorrow’s real estate professionals will require an altered skill set to succeed as roles shift to focus on managing complex data systems or focusing directly on client relationships. Much of the middle ground between those two roles is likely to disappear, which will be disruptive in the short-term, but over time will unlock new efficiencies in the industry.
The report predicted new technology will make everything from lease negotiations to property valuations more consistent, transparent and timely. Tenants and landlords will be able to interact online using information in real time, and investors will monitor their portfolios with constantly updating information. While the full impact of advanced technologies like the IoT and machine learning on the commercial real estate industry is unknown, it’s clear that change is on the horizon.